India's sharp increase in gold import duties has failed to curb the country's robust demand for the precious metal, with imports continuing to rise even after the higher tax structure took effect in May 2026. For overseas jewelry buyers, this signals sustained raw material demand from one of the world's largest gold-consuming markets, potentially influencing global gold prices and sourcing strategies for gold-based jewelry, including rings, necklaces, and bridal collections.
Import data shows resilience
According to a report by the Global Trade Research Initiative (GTRI), gold imports surged 81.7% year-on-year to $5.63 billion in April 2026, just before the duty hike. Even after the revised duty structure was implemented on 13 May 2026, imports rose 34% in May to $3.42 billion, compared with $2.55 billion a year earlier. Combined imports for April and May 2026 reached $9.04 billion, a 60.1% increase from $5.65 billion in the same period last year.
Duty structure revised sharply
The duty hike, announced via customs notifications on 12 May 2026 and effective the next day, reversed a reduction made in July 2024 when effective import duties were cut from 15% to 6%. Under the revised framework, the Basic Customs Duty (BCD) increased from 5% to 10%, and the Agriculture Infrastructure and Development Cess (AIDC) rose from 1% to 5%. Including the 3% Integrated GST, the total effective tax burden on imported gold now stands at about 18.4%.
Demand remains resilient despite higher taxes
Despite the steep increase in taxation, gold imports rose 24.1% to $72 billion in FY2025–26, compared with $58 billion in FY2024–25. GTRI attributes this resilience to strong jewelry consumption, heightened investor interest in safe-haven assets amid global uncertainty, and elevated international gold prices, which have pushed up the value of imports.
Limited impact of policy action so far
The data suggests that while the duty increase has slowed the pace of growth—from 81.7% in April to 34% in May—it has not significantly dampened overall demand. GTRI warns that sustained high imports could continue to exert pressure on India's trade deficit and foreign exchange outflows, particularly amid external uncertainty linked to energy price shocks from geopolitical tensions in West Asia.
What buyers should watch
Country-wise import breakdowns for May 2026 are still awaited. Once released, they are expected to show whether higher duties have shifted sourcing patterns among key suppliers such as the UAE, Switzerland, South Africa, and other major gold-exporting nations. For jewelry importers and distributors, this could signal changes in gold supply routes and pricing dynamics, affecting procurement decisions for gold-based products like earrings, bracelets, and gemstone-set jewelry.
Source: Read the original report | Published: June 16, 2026